Correlation Between US Bancorp and China Minsh
Can any of the company-specific risk be diversified away by investing in both US Bancorp and China Minsh at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining US Bancorp and China Minsh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and China Minsh, you can compare the effects of market volatilities on US Bancorp and China Minsh and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in US Bancorp with a short position of China Minsh. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and China Minsh.
Diversification Opportunities for US Bancorp and China Minsh
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USB-PH and China is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and China Minsh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minsh and US Bancorp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on US Bancorp are associated (or correlated) with China Minsh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minsh has no effect on the direction of US Bancorp i.e., US Bancorp and China Minsh go up and down completely randomly.
Pair Corralation between US Bancorp and China Minsh
Assuming the 90 days trading horizon US Bancorp is expected to generate 1.7 times less return on investment than China Minsh. But when comparing it to its historical volatility, US Bancorp is 4.09 times less risky than China Minsh. It trades about 0.33 of its potential returns per unit of risk. China Minsh is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 369.00 in China Minsh on August 30, 2024 and sell it today you would earn a total of 19.00 from holding China Minsh or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
US Bancorp vs. China Minsh
Performance |
| Timeline |
| US Bancorp |
| China Minsh |
US Bancorp and China Minsh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and China Minsh
The main advantage of trading using opposite US Bancorp and China Minsh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp position performs unexpectedly, China Minsh can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China Minsh will offset losses from the drop in China Minsh's long position.| US Bancorp vs. US Bancorp PERP | US Bancorp vs. KeyCorp | US Bancorp vs. KeyCorp | US Bancorp vs. Regions Financial |
| China Minsh vs. Hancock Whitney Corp | China Minsh vs. First Hawaiian | China Minsh vs. DBS Group Holdings | China Minsh vs. United Overseas Bank |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |